Multi-billion desert energy project under threat

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[BERLIN] An ambitious renewable energy project, which plans to produce electricity by tapping into desert sunshine and wind in the Middle East and North Africa, has hit troubled waters after losing the backing of governments and industrial partners, insiders say.

The goal of the Munich-based DESERTEC initiative is to generate sustainable electricity from sites rich in renewable energy, to help meet the region's and Europe's energy needs.

But over the past three weeks, the project has seen two of its
most important industrial partners pull out, and some key governments
are losing interest, said experts at the 3rd Desertec Industry
Initiative (Dii) Desert Energy Conference 2012, held in Berlin, Germany,
last week (7-9 November).

Two German multinational engineering and electronics companies,
Bosch and Siemens, say they have dropped out because of the economic
conditions. Meanwhile, the European government is waning in the
aftermath of the Arab spring and persistent political instability in the
region.

There was also a stark absence of Arab League and European ministers at the Dii meeting. Although Guido Westerwelle, the German federal minister for foreign affairs, and Philip Rösler, the minister of economy and technology, were scheduled to give speeches, neither attended. Rösler told Germany's Neue Osnabrücker Zeitung newspaper that he would "caution against too much euphoria [around Dii]".

"One of the main reasons that doubts grew around Dii's future
is the unstable political situation in the MENA [Middle East and North
Africa] region following the Arab spring," Mouldi Miled, a DESERTEC
Foundation co-founder, and executive director of the DESERTEC University
Network, tells SciDev.Net.

Santiago Seage, president of solar energy company Abengoa
Solar, says: "The transition from making Powerpoint [presentations] to
initiating power plants is really hard. We miss Europe's willingness to
take steps in the project."

Miled is concerned that if Dii continues to lose support from
its European partners, the Arab countries will have to depend on
themselves to complete the project.

Hassan Salem, assistant professor of engineering at Ain Shams
University in Cairo, Egypt, says that it was clear Egypt and Libya no
longer supported the initiative, as almost no government members or
scientists from the two countries had been invited to attend the
conference.

"The unstable political situation after the revolutions became a huge barrier to Dii," he says.

For five years, the DESERTEC project has been promising
— at an estimated cost of €400 billion — to pipe sustainable solar and
wind power from the Sahara through a Mediterranean grid to European
countries. But so far, little has been achieved on the ground, and the
project remains mired in political negotiations. Almost all speakers at
the conference stressed the need for speeding up political dialogue.

However, while government interest appears to be waning, Salem says that "it was obvious at the conference that businessmen are still quite enthusiastic".

Paddy Padmanathan, president and chief executive of Acwa Power International, a Saudi water
and power project company, is very optimistic. "Renewable energy is in a
really early stage, so it's natural to be fragmented," he says. "I am
very optimistic because whether you are importing [energy], like Saudi
Arabia, or exporting, like Jordan, you will get involved."

And despite the political difficulties, Dii will soon implement
its first project in Morocco (scheduled to finish the first phase in
2014) led by the renewable energy company RWE Innogy, with a cost that
could reach around US$800 million.

DESERTEC's chief executive, Paul van Son, has played down
concerns about key industry partners leaving: "We have 57 supporting
companies so if one of them steps out it will not be a problem," he
says.